Bitcoin Price Looks South After Worst Daily Loss Since November

Published on by Coindesk | Published on

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Bitcoin's price saw its biggest drop for seven weeks on Thursday, weakening the prospects of a bullish breakout above $4,100.

The world's largest cryptocurrency by market value hit a 3.5-week low of $3,503 yesterday, before closing at $3,627 - down 9.4 percent on the day.

That was the biggest single-day drop since Nov. 24 and the fourth biggest daily loss of the last two months, according to CoinDesk's Bitcoin Price Index.

Essentially, the hard-fought gains of the last two weeks have been erased in the last 24 hours.

Bitcoin fell to $3,500 yesterday, confirming a bearish doji reversal on the daily chart.

Adding credence to the bearish move, trading volumes jumped to the highest level since Dec. 21 and 14-day relative strength index breached the ascending trendline to the downside.

On the weekly chart, BTC has created a bearish outside reversal candle - this week's price action has engulfed the previous week's high and low - having failed to penetrate the 200-week exponential moving average hurdle for four weeks straight.

The candlestick pattern indicates that the week began with optimism, but is approaching a more pessimistic close.

As a result, it is widely considered a sign of bearish reversal.

A quick recovery above $4,000 would abort the bearish setup, although the probability of BTC picking up a strong bid in the short-term is quite low.

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